Americana: A 400-Year History of American Capitalism — Review

We often hear about America’s famous individualism and adherence to free market principles as one of the main reasons the country has ascended to economic hegemony. Government rarely gets any acclaim for its role in shaping an institutional framework that paved the way for innovation and businesses to thrive. Conversely, the country’s dependence on an underclass of people that provided their labor to cultivate resources and build the infrastructure foundational to America (for which they received little to nothing) rarely gets mentioned.

The author reminds us that effective government has always played an important role in shaping the country’s economic power:

1. Reforming and strictly enforcing property laws that not only recognized land property but also intellectual property (granting powerful economic incentives to innovate).
2. Mobilizing federal resources to dig canals, lay iron tracks and pave highway to connect the country.
3. Let’s not forget the R&D funded by taxpayers and carried out by the government which led to numerous breakthroughs which gave us refrigerators and the Internet!

The book also does not shy away from exposing the uneasy part of capitalism. The role of slavery in allowing the South to prosper in cotton and tobacco trade in the 18th and 19th century. And in the 20th century, the exploitation of Irish, Italian and all other immigrants which relegated them to brutal labor conditions in jobs that were foundational in creating the infrastructure that propelled the country ahead of Europe.

We learn about the story of the invention of the steam engine all the way to the conception of the iPhone, while being reminded of the social and institutional backdrop needed to incubate these breakthroughs. I highly recommend the book not only for it’s abundance of easy to read and interesting stories of businesses, but also the way it manages to balance the genius and tragedy of American capitalism.